Critical raw materials are the backbone of the green transition, enabling technologies that reduce emissions and promote sustainability. Among these, nickel plays a pivotal role. As a key element in stainless steel production, nickel enhances durability and corrosion resistance, making it indispensable for clean transition in infrastructure, renewable energy systems, and low-carbon solutions. While Outokumpu leads the way in circularity with up to 90% recycled material content, nickel remains essential to produce high-quality stainless steel for a more sustainable and resilient future.
Partnerships with our suppliers are central to our supply chain sustainability approach, including onboarding, risk-based assessments, and continuous improvement through regular engagement. We recognize that the most significant impact we can make is through working closely with our partners, e.g. through on-site assessments, to raise sustainability standards across the board. Our commitment extends beyond our direct suppliers to deeper tiers of the value chain, where transparency and shared responsibility are critical. This work is accelerating as regulations and expectations grow.
This commitment is particularly relevant in the context of ferronickel sourcing. Ferronickel is critical for stainless steel, yet the market is challenging both from sustainability and availability perspectives. Many producers have had to close their operations due to rising costs, while Indonesia, the world’s largest nickel producer, has been linked to environmental and social concerns such as deforestation, environmental pollution, and natural disasters which impact the local communities whose livelihood depend on natural resources, as is highlighted in a recent study by WWF. Meanwhile, an increasing amount of nickel production is controlled by companies with limited transparency. These realities limit the number of responsible sourcing options available to us, which is why we prioritize suppliers who share our values and demonstrate continuous improvement.
In 2021, we decided to discontinue purchases from our ferronickel supplier Vale after we learned of potential harm to the indigenous people near its Onça Puma mine in Brazil. After strengthening our own supply chain sustainability processes in line with UN Guiding Principles on Business and Human Rights (UNGPs) and working with Vale to improve theirs, we have decided to resume ferronickel purchases from Onça Puma.
Vale strengthens sustainability practices based on the partnership
Concerns about Vale’s Onça Puma mine in Brazil were raised by the Finnish NGO Finnwatch in a report published in 2021, including allegations of pollution in the Cateté River and adverse impacts on the Xikrin indigenous community. After finding out, Outokumpu conducted a human rights impact assessment with a third-party. Despite discontinuing purchases, we did not fully terminate our relationship with Vale but continued to communicate our sustainability requirements based on the guidance in the UNGPs.
In 2024, we conducted a comprehensive sustainability audit to assess Vale’s progress. The audit included an analysis about Cateté river and the pollution allegations by an independent water chemist. The audit concluded that Vale has advanced human rights due diligence processes aligned with the UNGPs and did not identify any clear indications that the Onça Puma mine is currently adversely affecting downstream water or sediment quality in the Cateté River.
Following the audit last year, Vale has now implemented all recommendations provided, demonstrating a clear commitment to improvement. Vale expanded air quality monitoring, trained the Xikrin community, analyzed waste and water quality, and implemented a stakeholder engagement plan aligned with international standards. We will also continue to monitor the situation and improvements based on the regular updates Vale is reporting on its progress. It is important for us to see that the local stakeholders, including Vale, continue to work together to identify potential causes for the adverse impacts the Xikrin are experiencing and mitigate those.
“For Vale Base Metals, the open and transparent dialogue reflects the importance of our partnership with Outokumpu and our shared commitment to protect the environment and communities where we operate. Collaboration and cooperation are key for the future, particularly in supporting sustainable, responsible mineral supply chains”, says Emily Olson, Chief Sustainability and Corporate Affairs at Vale Base Metals.
Continuing with our commitment to strengthen sustainability
Our commitment to sustainability extends beyond our own operations into the supply chains that provide our raw materials. For example, we aim for 100% of targeted suppliers to confirm compliance with our Supplier Code of Conduct by 2030.
We believe that collaboration is the most effective way to drive positive change across the industry. Our approach is consistent with the UNGPs: we work with suppliers to improve conditions and only terminate relationships if they don’t share our values and targets. Sustainability is a continuous journey – perfection is not the expectation, but a genuine commitment to progress is essential. Through our sustainable sourcing practices, we support supplier development, especially in regions or sectors where strong regulatory frameworks may be lacking. By maintaining an ongoing dialogue with Vale, we ensure transparency, continued monitoring of local developments, and support for continuous improvement.
Our vision is to accelerate a green and just transition across the stainless steel value chain together with our suppliers. This means sourcing materials, products, and services in a way that safeguards our planet and its people – without compromising quality or financial efficiency.
Supply chain sustainability is not a one-off initiative; it’s a continuous transformation. By partnering with suppliers like Vale, we raise the bar for sustainability standards across the industry and drive meaningful change where it matters most.